"What are these people thinking? Why are they going to VCs for venture capital to write social networking sites in Ruby on Rails? The whole point of Ruby on Rails is it gives you the ability to write applications without VC funding! That's what it was invented for!"
I think it's an interesting point, but using Rails doesn't mean you have to structure your business like 37 Signals. I did read Getting Real, but with a grain or two of salt. It had some really good points, but understanding their point and trying to emulate their business structure (as they suggest you should) are different things.
Busting your ass and forming a company with a larger growth potential is still an option. It makes things riskier, but some people are fine with that.
The point of this really should have been that you need to be cognizant of the type company you are creating, realistic about its chances for success and aware that VC funding is only a means to an end.
See, the problem that I think people are missing is that VC funding is no longer a means to an end.
Implicit in your comment is that a company without VC funding cannot grow as fast as a company with VC funding.
That was true ten years ago when a lot of costs were unavoidable: Server hardware ,server software, and you had to build a lot of software infrastructure from scratch.
Now all that is cheap, or free, and what isn't comes with lease terms.
Thus, lacking a big pile of money is not an inhibitor to growing big fast.
I never claimed VC funding is required for quick (or expansive growth). There are obvious examples where that's not the case.
I'm not sure how you can claim that VC funding is not a means to an end. There are clearly cases in which a lot of cash helps. Startups use money for many more things than servers.
If you're pursuing cash for equity for no reason and do not really need it, then yes of course that's a bad idea. If you're preemptively avoiding cash for equity without considering if it can help you get where you want to go, however, that's also a bad idea.
That's true, but I'm assuming that nobody here is working on a startup that's building medical devices, a manufacturing plant, or has a high government regulatory burden.
So, for your basic consumer oriented web startup, you don't need VC funding...
